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The Uncertain Tide of U.S. Immigration

Is entering the U.S. for business purposes becoming harder? For businesses sending employees to the U.S., the answer lately seems to be a resounding “yes.” While there have been a number of stories of Canadian business people experiencing difficulties crossing the U.S. border, uncertainty surrounding the North American Free Trade Agreement (“NAFTA”) and recent policy memoranda issued by U.S. Citizenship and Immigration Services (“USCIS”) are creating challenging obstacles for cross-border travel.

Recent U.S. Policy Memorandums Creating Uncertainty

In October of last year, U.S. Citizenship and Immigration Services released this policy memorandum which overturned a 13-year old policy relating to renewals of certain intra-company transfers. Under the old 2004 policy, USCIS officers were essentially told to renew the status of intra-company employees if the renewal application dealt with the same parties and the same underlying facts as the previous application. In fact, the old 2004 policy instructed USCIS officers to normally “defer” to any previous decision made.

In the four-page memo, USCIS rescinded this policy and provided “updated guidance” for officers. In this new memo, USCIS stated that this updated guidance was necessary to be “more consistent with the [USCIS]’s current priorities” and also to advance “policies that protect the interests of U.S. workers.”

While this memorandum does not explicitly tell officers to refuse individuals and companies who seek to renew certain intra-company employees, the message that has been sent is clear. The onus is on companies seeking to renew intra-company status. The likely scenario is that this memorandum has opened the door for more intra-company transfer refusals.

If that is not enough, in November USCIS released this policy memorandum on how to interpret the “economist” professional category under the NAFTA. This memorandum clarified that financial analysts, market research analysts and marketing specialists are not economists.

On the face of it, clarifying that a marketing specialist is not an economist would seem to be self-evident. However, what is curious about this memorandum is the timing. The “economist” category came into existence almost 30 years ago under the old Canada-U.S. Free Trade Agreement and, for almost 30 years, there has been no need to clarify this category. So, why do it now? Is the clarification coming about because of recent abuse of this category or is this clarification part of the U.S. administration’s “extreme vetting” of immigrants? Is the clarification coming about to make an officer’s job easier or to find another way to restrict immigration to the U.S.?

The Potential Elimination of NAFTA

One of the biggest threats to Canadian companies doing business in the U.S. is the possibility that NAFTA will not survive.

When NAFTA was introduced, it expanded on the previous Canada-U.S. Free Trade Agreement and created numerous immigration options for Canadian business people who needed to work in the U.S.

Two of the main immigration categories created by NAFTA are: (1) the NAFTA professional category; and (2) the NAFTA treaty trader and investor category. Unless replaced in some other way, if NAFTA does not survive, these immigration categories will likely disappear on both sides of the border.

While the elimination of these NAFTA categories would be a serious obstacle to cross border travel, there is one U.S. immigration category that will likely survive any cancellation of NAFTA: the NAFTA intra-company transfer category. This category allows certain multinational executives, managers and specialized knowledge employees to work in the U.S. (the “Intra-Company Transfer Category”).

The Intra-Company Transfer Category is an immigration category that is not founded on NAFTA. Accordingly, if NAFTA is eliminated, this category should still survive and be a pathway for some cross-border travel for executives, managers and specialized knowledge employees.

Do NAFTA Professionals and Treaty Traders and Investors Qualify as Intra-Company Transferees?

One of the immigration strategies we have been exploring with our clients is whether employees who would normally qualify as NAFTA professionals or NAFTA treaty traders and investors could qualify as intra-company transfers.

The intra-company transfer provisions require that a Canadian looking to work in the U.S. be employed by a multinational company outside the U.S. for at least one year. After one year of work experience outside the U.S. (which must be in a capacity as an executive, manager or specialized knowledge employee), the employee can be transferred to a related U.S. company.

While the intra-company transfer will not work for Canadian businesses that do not have offices in the U.S., this may be a viable option for multinational companies or companies seeking to set-up a new office in the U.S.

In terms of strategy, Canadian companies who would normally send employees to the U.S. as NAFTA professionals or treaty traders or investors should consider whether their employees also qualify as intra-company transfers. If the employee does qualify for the Intra-Company Transfer Category, given the uncertainty currently surrounding NAFTA, the Intra-Company Transfer Category may be a better option.

Going Forward ─ What Is a Business to Do?

As entering the U.S. for business purposes gets more challenging, it is increasingly important for Canadian businesses and Canadian lawyers to insure they work closely with qualified U.S. immigration counsel to determine the best U.S. immigration solution for their clients.

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